'This Week' Transcript: McCain

TAPPER: Good morning, and happy Fourth of July. This morning at a
ceremony in Kabul, General David Petraeus formally took command of
international forces in Afghanistan, including 93,000 American troops.
Petraeus acknowledged gains made by the Taliban, but assured his
audience that the U.S. was in the nearly 9-year-old war to win.

Joining me this morning from Kabul, Senator John McCain. He's
leading a congressional delegation to Afghanistan.

Senator, thanks so much for joining us.

MCCAIN: Thank you. Good to be with you.

TAPPER: Senator, General Petraeus assumed command in Afghanistan

Play

Senator John McCain on the War in Afghanistan, General Petraeus

earlier today, and here's how he defined what he called a critical
moment in this fight.

(BEGIN VIDEO CLIP)

PETRAEUS: We're engaged in a contest of wills. Our enemies are
doing all that they can to undermine the confidence of the Afghan
people. In so doing, they are killing and maiming innocent civilians on
a daily basis. No tactic is beneath the insurgents.

(END VIDEO CLIP)

TAPPER: Senator, I think a lot of Americans are wondering why,
after nine years of war, the Taliban has the momentum in this fight.

MCCAIN: Well, I'm not sure that the Taliban have the momentum right
now, Jake. The Taliban obviously are entrenched in places in parts of,
actually, the outskirts of Kandahar. There's areas where they are still
in control. There has been some progress. It's been hard-fought and
with great sacrifice.

But there's no doubt that we spent a lot of time, effort, American
blood and treasure on Iraq. And now is the time for us to continue this
mission and complete it successfully in Afghanistan.

TAPPER: There are currently 93,000 U.S. troops in Afghanistan, plus
43,000 NATO troops. You've said we need more troops because it's
unlikely that NATO will be able to fill its obligation, its pledge of
10,000 additional troops. Should President Obama tell the Pentagon to
send even more U.S. troops than he has already ordered?

MCCAIN: There will be an evaluation, an assessment made in
December. I think at that time, we will have a much better idea as to
how the mission is -- is progressing and whether we need more troops and
whether our NATO allies have fulfilled their commitment.

But what I worry about more than anything else is the -- the July of
2011 firm date, which the president has not -- certainly has not been
positive as far as our commitment is concerned. In other words, we need
a conditions-based situation, not a date for withdrawal.

A statement like, "We're not going to turn out the lights in the
middle of 2011," is indecipherable and certainly sounds an uncertain
trumpet. So I'm more concerned about the perception of our friends and
our enemies, as well as the people in Afghanistan, as to the depth of
our commitment. Our commitment must be: We will succeed, and then we
will withdraw.

TAPPER: Let's talk about that uncertain trumpet that -- that you
mentioned. What did the Bush trumpet sound like? There was an
unlimited commitment of U.S. troops for an unlimited amount of time
there, and that didn't seem to be effective, and yet you're criticizing
this July 2011 deadline, which would be the beginning of a transition
period. What did the previous strategy trumpet sound like?

MCCAIN: Well, the previous strategy was failing, and I said that it
was failing, and disagreed with our then-Secretary of Defense Rumsfeld,
as well as the president. Then we initiated a surge with General
Petraeus in charge, and we succeeded.

I just came from Baghdad. I went downtown with my two colleagues to
a bakery and to a store. The success there is remarkable. There are
still problems, but the success in remarkable.

But we didn't say that we were leaving until we had succeeded. I'm
all for dates for withdrawal, but that's after the strategy succeeds,
not before. That's a dramatic difference.

And I can tell you for sure, our people in the region are not sure
about whether we are going to be here after the middle of 2011, whether
we have succeeded or not. And it's clear that this strategy has not
gone as well as we had hoped, so that right away brings into question
the middle of 2011.

TAPPER: General Petraeus was asked about this July 2011 deadline in
his Senate confirmation hearings this week. Here's what he had to say.

(BEGIN VIDEO CLIP)

PETRAEUS: Let me be very clear, if I could, Senator. And not only
did I say that I supported it, I said that I agreed with it. I saw this
most importantly as the message of urgency to complement the message of
enormous additional commitment.

(END VIDEO CLIP)

TAPPER: So General Petraeus said that he not only supports it, he
agrees with it, that it's a message of urgency to the Afghan
government. Is General Petraeus wrong?

MCCAIN: General Petraeus has repeatedly said that it also has to be
condition-based. In other words, it's the president that leads. The
president should state unequivocally that we will leave when we have
succeeded. And to somehow put that burden on General Petraeus is not
appropriate. He is the military leader.

But the fact is that, if you say that you are setting a date certain
for leaving as his key advisers have, including, I think, one on your
show that said that we were -- that it is a, quote, "firm date," his
spokesperson said it's, quote, "etched in stone and he has the chisel,"
and other statements by his civilian advisers have undermined the belief
that we will have a conditions-based withdrawal.

So I know enough about warfare. I know enough about what strategy
and tactics are about. If you tell the enemy that you're leaving on a
date certain, unequivocally, then that enemy will wait until you leave.

TAPPER: Well, let's talk about the civilian leadership that -- that
you just mentioned. You seem to have been critical of Ambassador Karl
Eikenberry and Special Representative Richard Holbrooke. Do you think
Eikenberry should be replaced?

MCCAIN: I hope that -- that the ambassador and General Petraeus can
work together. I think that assessment needs to be made. Obviously,
the past relationships have not worked out as well as -- as they should
have, but I think an assessment ought to be made as to all of those
relationships, and we have to have the best team in place.

The ideal team, of course, was Ryan Crocker and David Petraeus in
Iraq. Let's hope we can establish that same kind of relationship here
in Afghanistan.

TAPPER: Almost a year ago, in August 2009, you were on this program
and you and George Stephanopoulos had this exchange about the progress
you said you were confident we would see in Afghanistan within 12 to 18
months.

(BEGIN VIDEO CLIP)

STEPHANOPOULOS: You say 12 to 18 months. What do we need to see in
12 to 18 months to make sure the public and the Congress stay behind
this war?

MCCAIN: I think you need to see a reversal of these very alarming
and disturbing trends on attacks, casualties, areas of the country that
the Taliban has increased control of. In other words, you need to see
all of those things reversed and on a significant downward slope, and I
think we can do that.

(END VIDEO CLIP)

TAPPER: Senator, do you think that we're going to see a reversal of
those trends in the next seven months?

MCCAIN: Well, I hope so. And as I said then, that it -- it needs
to happen. As I said earlier in response to your questions, it hasn't
gone as well as we had hoped. There has been some success, although
it's been bought at great cost in Marjah and other places. And we need
to succeed here. We cannot afford to lose. There will be catastrophic
effects in the region, as well as a return of the Taliban and Al Qaida.

And the people of -- of Afghanistan do not want the Taliban back.
So it -- I would remind you that the situation in Iraq, before we
started that surge, was far worse than the conditions here in Afghanistan.

I'm a bit disappointed we haven't seen more progress, but I still
believe we can succeed.

TAPPER: Senator, the chairman of the Republican National Committee,
Michael Steele, was recorded in recent days privately telling Republican
candidates the following about Afghanistan. Quote, "Keep in mind,
again, federal candidates, this was a war of Obama's choosing. This is
not something the United States had actively prosecuted or wanted to
engage in. If Obama is such a student of history, has he not understood
that you know that's the one thing you don't do is engage in a land war
in Afghanistan, all right, because everyone who has tried over 1,000
years of history has failed," unquote.

Republicans such as Congressman Tom Cole, William Kristol, Liz
Cheney have -- have said that Michael Steele needs to resign because of
those comments. Do you think a chairman of the Republican National
Committee can be effective if he thinks that the war in Afghanistan is
unwinnable, as Steele seems to think?

MCCAIN: I think those statements are wildly inaccurate, and there's
no excuse for them. Chairman Steele sent me an e-mail saying that he
was -- his remarks were misconstrued.

Look, I'm a Ronald Reagan Republican. I believe we have to win
here. I believe in freedom. But the fact is that I think that Mr.
Steele is going to have to assess as to whether he can still lead the
Republican Party as chairman of the Republican National Committee and
make an appropriate decision.

TAPPER: Senator, just one last question on Afghanistan, and then I
want to move on to Iraq. This week, a key House subcommittee blocked $4
billion in non-military and non-humanitarian aid for Afghanistan because
of concerns of rampant corruption in Afghanistan, including Karzai
allies having investigations into their behavior -- into their
activities being blocked. General Petraeus met with Karzai yesterday,
and Karzai called these concerns "baseless."

Do you support blocking these funds until the U.S. is more confident
the money is not being stolen?

MCCAIN: I think we need to go ahead and spend the money, but
corruption is a problem here in Afghanistan, and it's a serious one, and
it begins with the policemen on the beat, and that's why we're beginning
to have our military police partner with the police in places like
Kandahar. And there has to be a lot of work to be done.

There has been some small progress, but a lot more has to be done,
but I do not believe that it would -- we would succeed in motivating the
government to crack down on corruption if we cut off the funds. But I
also acknowledge it's a serious problem.

TAPPER: You were also in Iraq over the last few days where you met
with local officials. The inconclusive election there has increased
tensions and raised questions about President Obama's plan to end combat
operations at the end of August. Is that deadline still wise, given the
lack of a government right now?

MCCAIN: The deadline is still wise. And thanks to the security
situation, it can be met. We will be withdrawing an additional 28,000
troops between now and the end of August.

We had an inconclusive election in the year 2000, as well, and it
took us some time to sort it out. I think maybe we could look at the
glass being half-full in that it was a competitive election and one that
there was wide participation, something that doesn't happen a lot in
this part of the world.

TAPPER: I want to turn to...

MCCAIN: And I think they'll work it out.

TAPPER: I want to turn to some domestic issues, as long as I have
you. President Obama delivered a speech on immigration reform this
week. He mentioned you at one point. Here's part of that speech.

(BEGIN VIDEO CLIP)

OBAMA: Under the leadership of Senator Kennedy and Senator John
McCain, we worked across the aisle to help pass a bipartisan bill
through the Senate. And now, under the pressures of partisanship and
election year politics, many of the 11 Republican senators who voted for
reform in the past have now backed away from their previous support.

(END VIDEO CLIP)

TAPPER: Senator, that's you he's talking about. Why have you
backed away from comprehensive immigration reform, which you spoke so
passionately about in 2006 and 2007?

MCCAIN: First of all, let me -- and I -- I don't enjoy bringing
this up, but the fact is, then-Senator Obama supported amendments which
would have gutted the proposal that we had before the United States
Senate, which he said he would propose, an amendment that basically
gutted the temporary -- legal temporary worker program.

But setting that aside, I invite the president to come -- Jon Kyl
and I invite the president to come to the Arizona-Sonora border. The
violence is incredibly high. The human smuggling and drug cartels are
at a level of violence where 25,000 -- 23,000 Mexican citizens have been
murdered in the last few years, 5,000 already this year. There's a
level of violence which has increased to a significant degree, which
makes the situation far different than it was in 2007.

We have to secure our borders. When the -- when the -- when our
government has to put up signs in the southern part of our state that
warns people that they are in a human smuggling and drug smuggling area
and they have to be careful and are warned, then our border is not
secure and our citizens are not safe.

We can get the border secure. Jon Kyl and I have a 10-point plan.
We can get it secure, and then we can move on with comprehensive
immigration reform.

But I invite the president to come to the border, and he can see for
himself the absolute necessity of getting our border secure before more
violence spills over onto our side of the border, as this existential
struggle takes place between the Mexican government and the drug cartels
and the human smugglers, who are now working hand in glove.

TAPPER: I only have a couple more questions, Senator. I know your
time is valuable. Just to follow up on that, in 2007, you were quoted
as follows by Vanity Fair. "McCain had been asked how debate over the
immigration bill was playing politically. 'In the short term, it
probably galvanizes our base,' he said, 'In the long term, if you
alienate the Hispanics, you'll pay a heavy price.' Then he added,
unable to help himself, 'By the way, I think the fence is least
effective, but I'll build the goddamned fence if they want it.'"

You've long been critical of then-Senator Obama for pandering to
unions during the 2007 immigration reform debate. You just talked about
it a second ago. And -- and you're right. He did vote for amendments
that threatened to unravel the coalition.

But how is what you're doing now any different, except you're
pandering to the other side?

MCCAIN: Because, as I said before, the level of violence on the
border, the human smuggling, the fact that Phoenix, Arizona, is the
number-two kidnapping capital of the world, according to media reports,
the fact that a recent -- a ring recently was broken up that brought
people across our border to Phoenix, Arizona, where people were -- drugs
were distributed all over the country, as well as people, means that the
situation has changed dramatically.

That's why I asked the president to come to the border. It is not
the same as it was in 2007. And the people deserve not to have our
ranchers murdered, not to have a deputy shot by a drug smuggler with an
AK-47 in Pinal County. The situation has dramatically changed, and the
statistics absolutely back that up.

TAPPER: All right. Finally, Senator, Senator Republican Leader
Mitch McConnell just announced in the last few days that he will vote
against Elena Kagan's Supreme Court nomination, if her nomination does
get to the floor of the Senate. Have you made a decision about how you
will vote?

MCCAIN: Not quite, but I intend to decide this coming week, Jake.

TAPPER: All right. Senator John McCain, thanks so much. Safe
travels, and thanks for joining us.

TAPPER: And we're joined now by our roundtable. First off, former
spokesman for Bush in Iraq and a current member of the Council on
Foreign Relations, Dan Senor, his book, "Start-Up Nation: The Story of
Israel's Economic Miracle."

Also, from Univision, Jorge Ramos, his book -- I feel like Oprah --
"A Country for All: An Immigrant Manifesto." Hopefully, I'll have some
Oprah effect on you guys.

From the New York Times, Paul Krugman. From Bloomberg, Al Hunt.
And from the Atlanta Journal-Constitution, Cynthia Tucker. Bring your
books next time. I'll see if I can work my magic.

Now, Dan, I'll start with you. Senator McCain seemed to stop just
short of calling for Steele's resignation. What do you think?

SENOR: Well, Chairman Steele has been furiously working the phones
this weekend to try to explain that, at worse, this was a gaffe, at
best, what he said was taken out of context.

I think it's important to take a step back and recognize -- his
historical inaccuracies notwithstanding -- got some basic facts wrong --
he did articulate a real point of view. I mean, it's a real point of
view out there by those who are opposed to the war in Afghanistan, that
as he said, for centuries, people have tried to succeed in Afghanistan.
Land wars never work in Afghanistan, which was a direct criticism of the
McChrystal-Petraeus counterinsurgency strategy.

And it's fine. He's entitled to that point of view. It just
happens to be the point of view of organizations like MoveOn.org, and
you see that point of view articulated on liberal blogs. It's the view
of many of the Democratic members of Congress who voted for a timeline
this past week.

So it's one thing for him personally to have that point of view, but
for the chairman of the party to articulate that point of view, to
advance that point of view is indefensible.

And I would also say, what we've seen over the last couple weeks is
a very sensitive and raw moment as it relates to Afghanistan. And it
has been admirable how serious our leaders, military and civilian, have
stepped up.

I mean, McChrystal stepping down the way he did, Petraeus stepping
in, taking a demotion from his Central Command position to step in,
President Obama acting swiftly and recommitting to Afghanistan when he
would have had an inflection point to change policy if he wanted to, all
of these people have been acting incredibly seriously.

And what's striking about Steele is how fundamentally unserious he
-- giving political counsel, how to frame this debate in a political
context for candidates, I think is -- is actually offensive.

TAPPER: And you think he should step down?

SENOR: There's no -- I mean, I don't think the Republican Party can
seriously engage in foreign policy with credibility if its chairman is
engaging in this kind of rhetoric.

TAPPER: Jorge?

RAMOS: Because it's something so fundamental. It's like if 9/11
never happened. I mean, that's -- that's -- that's the point.

But now, going beyond Steele's comment, what's so interesting is
that I think there's a contradiction in Afghanistan right now. On one
hand, how can you be completely fully committed to a war and at the same
time say that you're going to be leaving and setting a deadline?

I think many Americans and politicians would be hard-pressed right
now to -- to know exactly and to explain, what are we doing in
Afghanistan? I know obviously we invaded Afghanistan after 9/11.
Obviously, we didn't want the Taliban to be supporting Al Qaida and
other terrorist groups.

But at the same time, what are we doing right now in Afghanistan? I
don't think that's very clear, and I think that's -- that's clearly
setting up other questions.

TAPPER: Paul, the spokesman for the Democratic National Committee,
Brad Woodhouse, made a comment that aroused the ire of some liberal
bloggers. Woodhouse said about Steele's comments, "The American people
will be interested to hear that the leader of the Republican Party
thinks recent events related to the war are comical and that he's
betting against our troops and rooting for failure in Afghanistan. It's
simply unconscionable that Michael Steele would undermine the morale of
our troops when what they need is our support and encouragement."

Liberal writers such as Greg Sargent at the Washington Post, Glenn
Greenwald at Salon have -- have criticized that, saying that the DNC is
using Karl Rove-like tactics.

KRUGMAN: Yes, and this was wrong. I mean, there's an
understandable frustration among Democrats with the hypocrisy, right?
All during the Bush years, any criticism of Bush's war policy was
unpatriotic, and now the Republicans are happy to criticize the war
policy of -- of President Obama.

But the way you -- you deal with that is by condemning the
hypocrisy, not by turning into the Bush people, not by going back to
it. So this was a -- this was a bad misstep. It was a cheap shot, when
what you really needed was to talk about it seriously.

TAPPER: Al, I wonder if Chairman Steele is an outlier or if he is
giving voice to a concern that a lot of Republicans legitimately feel
about this war, which is now America's longest war?

HUNT: Yes, Jake, I think that's a good question. First of all, I
think Michael Steele -- I wonder if he's a Democratic mole. If he had
to resign every time he said something silly, he'd be gone about 15
times by now.

But I do think there's a larger point here, and that is that a
senior member of the House told me, if there had been a private vote on
that supplemental bill for Afghan funding, it would have lost by a
decisive majority. Many Democrats and more Republicans than you think
-- there's tremendous anxiety. Nobody thinks this war is going well
right now. No one sees the light, if you will, at the end of the tunnel.

So I think even though Michael Steele is not a very good or very
articulate or very credible spokesman for much, if anything, I do think
that those reflected that -- that anxiety.

TAPPER: Cynthia, you once called -- and let me underline -- you
once called Michael Steele an affirmative action hire gone bad. What's
your take on this?

TUCKER: Well, Michael Steele is a self-aggrandizing gaffe-prone
incompetent who would have been fired a long time ago were he not
black. Of course, the irony is that he never would have been voted in
as chairman of the Republican Party were he not black.

Let's remember how the party wound up with Michael Steele. In
November 2008, the party was devastated that the Democrats had elected
the nation's first black president, while the Republican Party was stuck
with being seen as largely the party of aging white people, with good
reason, a party that was hostile to people of color, especially blacks
and Latinos.

So the party needed a new face, preferably a face of color, and they
didn't have very many officials to choose from, so they came up with
Michael Steele. And it is very ironic, since the Republicans have been
so critical of affirmative action, to watch them stuck with their
affirmative action hire that they dare not get rid of, because that
would generate even more controversy.

TAPPER: All right. Dan...

SENOR: And I just want to come back to something Al said. I mean,
you may be right that behind closed doors many Republicans have great
apprehension about Afghanistan. What is, I think, admirable is that
despite they have that -- despite that they have that apprehension and
despite there -- that there is political liability in sticking with this
war for many of these members of Congress, that they're still standing
with President Obama and trying to unite the country, actually, behind
his war strategy. That's admirable.

And -- and the reason Steele should resign is because he has no
business as being the chairman of the party taking on a position that
actually in direct contradiction to that.

HUNT: Well, that's one way to look at it. The other way to look at
it is, it's Obama's war, so if it goes badly, those Republicans are
going to get stuck with it. I think -- I think a lot of it has to do
with that kind of calculation, Dan. I don't -- I don't think a lot of
them are doing it in order to help Barack Obama.

SENOR: No, they're not doing it to help Barack Obama. I think
they're doing it to -- because they support the war strategy, they
support our engagement in Afghanistan, they support our troops, and I
think the country should be united.

This is a long -- I mean, this idea of opposition political parties
trying to hang a war on the president in power goes way back. Tom DeLay
famously called the Balkans war Clinton's war. You can -- Grenada was
Reagan's war. Panama was Bush, Sr.'s, war. I mean, this goes way back,
opposition parties sort of capitalizing on a neo-isolationist politics.

This is unique. This is -- this is an extremely sensitive moment on
a war that people are tiring of. And Republicans, despite their fierce
criticism of the Obama agenda on a range of other fronts, are actually
standing with the president on this. And for the chairman of the party
to be -- to be turning that upside down, I think, is -- is dangerous.

TAPPER: And just before we go to break, I want to underline that
what -- we're unanimous in Steele's assertion that this was a war of
Obama's choosing is just crazy talk.

SENOR: It's actually factually incorrect.

TUCKER: Absolutely.

TAPPER: It couldn't be wrong -- it couldn't -- it's wrong in about
15 ways.

SENOR: Right. Right.

TAPPER: All right, but we'll be back with more of the roundtable.
Friday's dismal jobs report, is the jobless recovery turning into a
double-dip recession? What will that mean for the midterms? Plus,
immigration reform and the Elena Kagan hearings. And later, the Sunday
funnies.

(BEGIN VIDEO CLIP)

LETTERMAN: Yes, Russian spies tried to blend in. They were acting
like Americans. As a matter of fact, for two weeks, they were
pretending they loved soccer.

(LAUGHTER)

(END VIDEO CLIP)

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

KOHL: What issues motivate you the most? And what excites you
about the job?

KAGAN: It's an opportunity to serve this country in a way that, you
know, fits with whatever talents I might have.

KOHL: What are the things you feel most passionate about? How are
you going to make a difference as a Supreme Court justice?

KAGAN: What motivates me primarily is the opportunity to safeguard
the rule of law.

KOHL: I'm sure you're a woman of passion. Where are your passions?

(END VIDEO CLIP)

TAPPER: Well, 15 years ago, Elena Kagan criticized Supreme Court
confirmation hearings as a "vapid and hollow charade," and there you go.

Joining us to discuss that and other topics, from the Council on
Foreign Relations, Dan Senor; from Univision, Jorge Ramos; from the New
York Times, Paul Krugman; from Bloomberg, Al Hunt; and from the Atlanta
Journal-Constitution, Cynthia Tucker.

Let's start with more bad news on the economic front. Let me put up
some numbers here. In June, we found out 125,000 jobs were lost, only
83,000 private-sector jobs were created, and we also heard that in May
pending home sales were down 30 percent.

Paul, have we made any headway in the last six or seven months?

KRUGMAN: On the things that matter, no. Basically, we're -- we're
holding. The fraction of the adult population that's employed is
basically flat, which is saying that we're -- you know, we're not --
things are not getting worse, but they're not getting better, and we're
in a bad place. So, no, this is not good.

TAPPER: And you think we should do what? What do we need to do?

KRUGMAN: More stimulus. I mean, we -- we had -- you know, right
from the beginning -- you know, luckily, some of us have a track
record. Right from the beginning, January-February of 2009, looking at
the scale of the crisis, we said this program -- although it sounds like
a lot of money, $700 billion or $800 billion, is actually not enough,
that you need something bigger.

But for a variety of reasons, we didn't get a program that was
bigger, and we got a program also that starts to fade out just about
now, middle of 2010, by which time, you know, the assumption was that --
that we'd have a self-sustaining recovery underway, but we don't, which
was always a serious risk.

So, no, this is -- this is a pretty grim situation. We really
should be going in for another stimulus program which has a chance for
approximately minus 5 percent of getting through Congress right now.

TAPPER: Are we facing a double-dip recession?

KRUGMAN: You know, our terminology is not helping us right now.
Suppose that the economy grows at 1 percent for the rest of the year or
next year-and-a-half and the unemployment rate rises to 10.3 percent.
Probably that won't be considered a recession, because GDP is growing.

We're producing more stuff, but we're actually losing ground on the
jobs front, so that's the most likely -- you know, I'm not sure it'll be
-- unemployment will go that high, but the most likely thing is
something where it isn't formally a recession, GDP isn't shrinking, but
the job market is losing ground, certainly not gaining ground. It'll
feel like a double dip, whatever the recession data say it is.

TAPPER: Cynthia, is it even possible to pass another stimulus in
this Congress? I mean, we can't even get passed unemployment insurance
extensions or $50 billion in emergency spending for cities and states.
Do you think Congress can pass a stimulus?

TUCKER: Jake, I think it is absolutely crazy that the Senate has
refused to extend unemployment benefits. If they won't do that, it's
pretty clear that they won't pass the robust kind of stimulus or jobs bill.

I think it's bad news for the Democrats to call it stimulus, because
that has -- as a brand, that doesn't go over very well with the public.
But the jobs bill has gotten smaller and smaller and smaller, and even
that seems to have very little chance of passing.

And it's mysterious why the Democrats are responding in this way.
It's no mystery about the Republicans. They don't care if the -- in
November, for the midterms, the -- the Democrats are facing a really
lousy economy. They figure that voters will take that out on the Democrats.

But it's more a mystery why Democrats are responding this way. They
seem to be frightened of the voters and believe that voters are
absolutely furious about the deficit. But, in fact, that doesn't show
up in polls.

The vast majority of polls show Americans are more concerned about
jobs. That's the number-one issue. Concern over the deficit is
rising. But in most polls, voters rank concern about jobs over concern
about the deficit.

TAPPER: Dan?

SENOR: Yes, I would say there -- there's a big question going on in
Congress and across the country. Where does this end? I mean, what you
and Paul are arguing for is not a -- a difference in strategy. You're
arguing for a difference in degree, amount of spending. The strategy is
the right strategy, is what you're basically saying, the administration
strategy.

Now, there are two models that people are talking about, you hear
members of Congress talking about. One is Greece. In 2012, the amount
of debt that the U.S. government will accumulate will be bigger than our
economy produces. That looks a lot like Greece or Japan, which has
something like 200 percent of debt to GDP.

I mean, if you look at just the interest payments alone that the
Japanese government pays, it accounts for 25 percent -- the interest on
its own debt, 25 percent of its national budget. Now, its interest
payment is 1 percent.

KRUGMAN: That is not right. We can't do this, Dan, right now, but
that number is not...

SENOR: I will -- I will happily provide it for you.

KRUGMAN: That's -- that's just not right.

SENOR: But the point is, is that...

TAPPER: We'll bring in PolitiFact on that one.

SENOR: Exactly. You begin to get in a situation where the interest
payments on the debt become unsustainable, the debt becomes
unsustainable, and there's a lot of uncertainty. There's uncertainty
now about the Bush -- the expiration of the Bush tax cuts, the impact
that'll have on the economy, the impact on health care, the Obamacare
spending, what impact that will have, possible cap and trade. And
people are just sitting on the sidelines saying, "Where does this end?"

RAMOS: But the debate, I think -- the debate is right there. I
mean, do we -- do we really need the government right now just more
intervention, more stimulus, or are we going to go just to -- to cut the
deficit? I think we -- we need both, but at this point, in order to
just to have a recovery summer, as Vice President Biden promised, we
need -- we need -- we need more government intervention.

KRUGMAN: The economics is really clear. You need to commit to
doing something about the deficit once the economy has recovered. But
cutting right now is -- doesn't even do very much for your budget
position, because it makes the economy weaker, it means less revenues.
It's really going to hurt. The -- the arithmetic of budget cuts now is
just terrible.

And, you know, you have to have some sense of scale here, right?
We're looking at a -- a U.S. government that 10 years from now will
probably owe something like $20 trillion. Whether we borrow another
$500 billion now is not going to make a big difference in that
position. It's really trivial. But it can make a huge difference to
the fate of the -- you know, the 15 million people who are unemployed in
the United States right now.

The idea -- people using these long-run budget concerns as a way to
argue against helping unemployed, when the average duration of
unemployment now is about 35 weeks, that is -- that -- I don't think --
I don't think -- for most of the people making this argument, I don't
think it's sincere. They're just using the occasion.

TAPPER: Al, walk us -- walk us through the politics here. Why
can't they pass unemployment extensions or this emergency spending on
Capitol Hill, if Democrats control both the House and the Senate?

HUNT: Well, because they need 60 votes in the Senate, and they
don't have 60 votes. I think they will pass that ultimately. They'll
do little things. They won't do the sort of stimulus that Paul is
talking about.

I think the fundamental problem here, Jake, and -- and, Dan, I think
what you're talking about is 5, 7, 10 years out, not right now. We
can't walk and -- and chew gum at the same time. We ought to be dealing
with long-term deficits in the long term and short-term stimulus, which
this incredibly sluggish economy needs right now.

The politics just are lousy, though, Jake. The -- I don't know if
it's the Republicans, if it's conservative Democrats, but the -- but the
side that talks about the need to rein in the federal government, this
is -- this is not very rational -- has really -- is winning that debate.

And when you talk to people about the stimulus, Paul may be right.
There should have been a bigger stimulus. Barack Obama thinks there
should have been a bigger stimulus. The reason there wasn't, because
you couldn't get it through, even -- even a year ago. I mean, you know,
meet Ben Nelson. But -- but -- but...

TAPPER: Or Susan Collins or Olympia Snowe or Arlen Specter.

HUNT: But -- but -- but right now, that -- that -- that argument
that we have to rein in -- because the stimulus didn't work, well, I
think most economists would say the stimulus did work...

(UNKNOWN): It did work.

HUNT: ... in the sense it would have been a lot worse if there
hadn't been one. But when people talk about the stimulus, they
associate it with bank bailouts and auto bailouts, which had nothing to
do with the stimulus.

TAPPER: Let me bring -- let me bring this out, because we -- I had
this made. This is something that -- in February, the Obama
administration was very excited. They brought out this icon, which
shows all the jobs being lost, and then the stimulus passes, and how job
losses and now job gains happen.

Now we have this. I think I'm doing this correctly. And, Paul,
where -- where are we going from here? And how much does this really
bad bar graph impact the stimulus politics?

KRUGMAN: Well, I mean, now, we know that that's -- last -- last
month, the previous month wasn't as good as it looks and the current
month isn't as bad as it looks...

TAPPER: Because of the census.

KRUGMAN: ... because of census jobs. So it's -- so what's actually
happening is the private sector is continuing to add jobs, but slow, not
enough to make a dent in the unemployment.

Yes, it -- this has been always the -- the track for stimulus. If
you -- if you do a half-measure, which is what we did, in the face of
this incredibly negative shock to the economy, the worst financial shock
since the 1930s, then the odds were even -- in -- in advance, the odds
were pretty good that you were going to end up with a situation where
things were actually not all that good, even after the stimulus had gone
into effect.

And then the argument -- the counterfactual that says, well, they
would be much worse if we hadn't done this, although true, doesn't cut
very much politically.

Plus, there's this worldwide panic. I mean, it's not just the
United States. Everyone out there has been saying, oh, you know, we've
got to move, because even though the arithmetic says that what we spend
on stimulus now isn't really going to matter very much, the bond markets
will turn on us.

And this is -- I've been calling it the attack of the invisible bond
vigilantes, because everybody is afraid that the bond market is going to
turn on us, and they -- they're doing that, even though the actual fact
is that the bond markets are signaling a willingness to lend the U.S.
government lots of money at very low interest rates, because they see
the U.S. government as the only safe thing out there.

RAMOS: (inaudible) recovery without -- without jobs. I mean, we
have created -- the private sector created 83,000 jobs. And just to
keep pace with the new workers, we need 130,000 per month. So -- so we
are in a really bad situation.

But are we going to be cutting deficits right now? I mean, is that
-- is that the way to go?

KRUGMAN: I'm simply...

RAMOS: We -- we can go -- I'm sorry -- we can go the way of Greece
or -- or I don't know if you've seen the (inaudible) coming from Puerto
Rico, but they've been cutting the deficit, and then we have this
violent repression of the police against students and demonstrators.

(CROSSTALK)

KRUGMAN: ... the countries -- the countries that actually have gone
the fiscal austerity route...

TAPPER: Germany and Greece.

KRUGMAN: Well, Germany is only saying they're going to do it. They
haven't done it yet. Greece is a -- Greece is a special case, because
they really were massively irresponsible, you know, mega times (ph).

But look at Ireland, which has been a good soldier in this crisis,
has done everything it was supposed to, savage cuts. Their deficit has
hardly gone down, because their economy has shrunk so much that the
revenues have collapsed. They have mass unemployment. It's -- it's --
it's a mess. And the -- and the markets aren't even rewarding them.

They're -- you know, the -- the cost of insuring against an Irish
default has gone up, not down, after the austerity. So there's this --
you know, while we actually have some evidence of -- of how this works,
and it works terribly.

TAPPER: Cynthia?

TUCKER: Well, I think that President Obama deserves some of the
blame for the politics on this, not the policy. He does want more
stimulus, and that's absolutely the right approach, I think. But the
public is clearly confused about the difference between short-term
deficits and long-term deficits.

The -- our problem will become enormous in about 2015 or 2020, but
the very worst way to go about cutting the deficits is to let people
stay unemployed. If they're jobless, they can't pay taxes. If they
can't pay taxes, the deficit gets worse.

And I think that the president could have done a much better job of
explaining that. I think he still could, but he sent mixed messages.
He has a deficit reduction commission. He's talked about cutting or
freezing federal agencies. And people get confused by that, and they
think that problems are immediate.

SENOR: He didn't send a mixed message. He actually was very
clear. If the Congress didn't pass the stimulus, unemployment would
rise about 8 percent. If they passed the stimulus, it would stay below
8 percent. His problem is being held accountable to what he said would
occur if his bill -- if his stimulus package was passed.

And now he's saying, well, it could have been this -- unemployment
could have been 13 percent, 14 percent or 15 percent, what he said in
Wisconsin last week. The reality is, you may be right that the crushing
effects of the debt burden won't be felt for some time, but it is having
an effect on investors and lenders and employers today.

People know this -- this debt and deficit burden is unsustainable
without major tax increases in the future. Major tax increases and the
uncertainty that's associated with them makes it very hard for the
private-sector economy to engage. And that's who's on the sidelines
right now.

KRUGMAN: I just want to say, that's a -- there is not a hint of
what you're saying in the data, not a hint that the debt burden is
what's discouraging -- businesses aren't investing because they have
massive excess capacity.

But let -- let me say, on the politics, there's an interesting
contrast between Obama 18 months in and Ronald Reagan 18 months in.
Eighteen months into the Reagan administration, things were terrible.
The bottom was falling out of the economy. The unemployment rate had
risen much more drastically. And in Reagan's case, it was a recession
that started on his watch, as opposed to -- to the Obama case.

Reagan was absolutely, completely defending his philosophy, didn't
-- gave no ground whatsoever in his public statements, in his speeches
during 1982. Obama's been trimming the whole way, saying, oh, yes,
well, we'll going to -- we're going to freeze discretionary spending...

TAPPER: And non-security discretionary.

(CROSSTALK)

KRUGMAN: ... went on FOX News to say, you know, if we don't balance
the budget, we'll have a double-dip recession, which had all of his --
his own economists going, "Oh, my god. What did he say?" So he -- he
has been giving mixed messages.

His -- his urge to split the difference between the sides, even when
one side is actually certainly, from his own point of view, totally
wrong, has certainly hindered. Would it have made a difference if he
was stronger? I don't know. But he's certainly not been strong...

(CROSSTALK)

TAPPER: I want to -- I want to change topics. I'm sorry. We only
have a few minutes, and President Obama this week did something else
significant, which he gave his first speech on immigration reform.
Jorge, I want to use some tape from an interview you did with
then-Senator Obama in 2008.

(BEGIN VIDEO CLIP)

OBAMA: I cannot guarantee that it's going to be in the first 100
days. But what I can -- what I can...

RAMOS: The first month?

OBAMA: ... what I guarantee is, is that we will have in the first
year an immigration bill that I strongly support and that I'm promoting
and that I want to move that forward as quickly as possible.

RAMOS: In the first year?

OBAMA: In my first year.

(END VIDEO CLIP)

TAPPER: So that's known in the Hispanic community as Obama's
promise. Did -- did he keep it?

We were -- we've been waiting for 18 months for change. We haven't
seen change. Not only that, President Barack Obama has deported more
people in his first year in office than George W. Bush in his last year
in office.

And the speech last Thursday I think was a good speech, even a great
speech at some point, but we needed action. He could have stopped
deportations for students. He could have stopped deportations for the
parents of U.S. citizens. He could have called for a bipartisan meeting
at the White House. He could have been much more specific on an
immigration bill, and -- and he wasn't.

Now, let's -- let's be clear. I mean, he doesn't have the 60 votes
in the Senate right now. So there's really nothing he -- he can do.

But I wish he could have moved earlier, I mean, when he had the 60
votes in -- in the Senate. And the consequences politically are huge.
He -- the Hispanic community is -- is really disillusioned, is very
frustrated. Sixty-nine percent of the Latinos supported President
Barack Obama last January, and now it's only 57 percent.

TAPPER: In the latest Gallup poll.

RAMOS: In the latest Gallup poll. So -- so -- so something is --
is -- is (inaudible) he promised change, and change is not here.

TAPPER: Al, why is President Obama bringing this issue up now?

HUNT: To frame it for November, because -- and to at least address
part of what Jorge said, that I care, that this is an issue that matters
to me. Look, his docket was full. I -- I have some sympathy for him.
I mean, if he was going to do immigration, he has to either -- either
give up on health care -- I mean...

RAMOS: No, he (inaudible) his promise. Nobody forced him to promise.

HUNT: No -- no -- no question.

RAMOS: He got 67 percent of the Hispanic vote.

HUNT: I just don't think the politics are there to load the dockets
will all that. And I think now it's being brought up not because
there's any legislative chance -- there is none -- but it is to frame
the debate for the November elections. And I think the -- Obama hopes
that this will energize and get back some of that 12 percent that he's
lost among Hispanic voters. The Republicans are counting on the anger
of people out there.

I must say, John McCain, in his interview with you, Jake, that was
extraordinary to say that crime is up there. He's talking about
Mexico. Crime is down in Arizona. Every single academic study that's
been done shows that immigrants commit fewer crimes.

RAMOS: That's right.

HUNT: We have a system where there are now three-and-a-half-fold
more illegal immigrants than there were 20 years ago. It's a system
that's broke. And for John McCain to say that there's been a dramatic
change just simply is not the case.

TAPPER: Dan, Republicans say that the president is bringing this up
for cynical reasons, to drum up Hispanic voters.

SENOR: Right. Well, if he were serious about immigration reform,
he would provide some real specifics, a real plan. He didn't do that
the other day. It was just sort of platitudinal.

And -- and particularly against the backdrop of what Senator McCain
said and others have said, President Obama absolutely played politics
with this issue in 2007 when he was facing a Democratic primary. And
John McCain and Ted Kennedy worked out a deal to keep out all these
amendments that could have destroyed the entire McCain-Kennedy package,
amendments from the Democrat -- extreme Democrats and extreme
Republicans, and Obama effectively, you know, contributed in blowing --
contributed to blowing that up.

And so for him now to be lecturing Republicans about not playing
politics for this issue -- with this issue -- they view it as a little
disingenuous. The reality is -- let me -- the reality is, the best
thing for Barack Obama's chances for success on immigration reform is
the Republicans actually winning majority in Congress. He will lead that...

(CROSSTALK)

(UNKNOWN): ... never get it done.

(UNKNOWN): The Democrats will never pass a bill.

HUNT: Dan, you're very smart. You could not be more wrong. The
Republican Party has been taken over by the nativists, by the
anti-immigrant.

TUCKER: Absolutely.

HUNT: You cannot -- Mitt Romney did a 180 because you cannot look
at John McCain today, the politics, they are nativist. And that's...

TAPPER: Hold on one second. We only got a minute left. Paul, then
Cynthia.

(CROSSTALK)

KRUGMAN: The -- the Republican Party for these past 30 years has
been kind of a coalition between a cultural right, which is also
basically anti-immigrant, and an economic right, which is kind of
favorable to immigration reform. What's happened in the last year is
that the cultural right has taken over. The economic right no longer
calls the shots. And that's why we can't get immigration legislation.

TAPPER: Cynthia, quickly?

TUCKER: I was going to say the same thing, that actually this fell
apart among Republicans in 2007 with -- those 11 Republican senators
stepped away from the deal they had previously supported, and the
politics are even worse now than they were then.

(CROSSTALK)

RAMOS: I mean, it's incredible that the most powerful country in
the world is prosecuting 11 million people.

SENOR: We have a test case on what you're saying, right? It's very
easy to say that the politics of -- cultural conservative politics have
gone native.

TAPPER: Dan...

(CROSSTALK)

SENOR: In California, you had a gubernatorial primary, Meg Whitman...

TAPPER: This is going to continue in the green room.

(CROSSTALK)

TAPPER: I'm sorry. We're going to talk more about that in the
green room. The roundtable will continue there on abcnews.com, or later
you can also find our fact checks courtesy of PolitiFact.